Sri Lanka’s inflation fell in March

Sri Lanka’s headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI), fell to 7 per cent in March from 8.1 per cent in February, the Central Bank said in a statement on Wednesday, adding that it was largely due to government intervention to reduce prices of some food items during the COVID-19 pandemic.

Accordingly, food inflation (Y-o-Y) declined to 14.1 per cent in March from 16.3 per cent in February. Meanwhile, non-food inflation (Y-o-Y) was recorded at 1.8 per cent in March.

The change in the NCPI measured on an annual average basis increased to 4.9 per cent in March from 4.5 per cent in February.
“The monthly change of the NCPI recorded at -1.3 per cent in March was due to declines observed in prices of items in the food category, driven by the seasonal supply of food crops and timely intervention of the government to reduce prices of certain food items amid COVID-19 outbreak.

Accordingly, within the food category, prices of vegetables, red onions, rice and dhal recorded decreases in March. However, within the non-food category, prices of the items in alcoholic beverages and tobacco (betel leaves); and health (payments to medical tests) sub-categories recorded increases,” the statement said.
Continuing its decreasing trend for the fifth consecutive month, the core inflation (Y-O-Y) decreased further to 3.2 per cent in March from 3.4 per cent in February.

Meanwhile, annual average core inflation decreased to 5.2 per cent in March from 5.5 per cent in February.